2022 (8) TMI 1156 - Tri - Insolvency and Bankruptcy

Liquidation against M/s. Khator Fibre and Fabrics Limited (Corporate Debtor) - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In view of the satisfaction of the conditions provided under Section 33 of the Code, the Corporate Debtor, M/s. Khator Fibre and Fabrics Limited is directed to be liquidated in the manner as laid down in Chapter III of the Code. The Corporate Debtor is ordered to be liquidated - Application allowed.

Issues:
1. Application for Liquidation under Section 33(2) of the Insolvency and Bankruptcy Code, 2016.
2. Approval of Resolution Professional (RP) by Committee of Creditors (CoC) for Liquidation.
3. Appointment of Liquidator for Corporate Debtor.
4. Compliance with Regulations for Liquidation Process.
5. Liquidation Order and Directions for the Liquidator.

Issue 1: Application for Liquidation under Section 33(2) of the Insolvency and Bankruptcy Code, 2016:
The Application was filed by the Resolution Professional (RP) for passing an order of Liquidation against the Corporate Debtor due to the non-availability of sufficient assets for the Corporate Insolvency Resolution Process (CIRP). The CoC members, specifically Union Bank of India, voted and resolved for liquidation as assets were insufficient to cover CIRP costs.

Issue 2: Approval of Resolution Professional (RP) by Committee of Creditors (CoC) for Liquidation:
The CoC approved the appointment of the RP as Liquidator in the 6th meeting, and the proposed Liquidator, Ms. Megha Agrawal, submitted her consent to act as the Liquidator. The RP's proposal for Liquidator appointment was rejected earlier, leading to the recommendation of Ms. Megha Agrawal as the Liquidator.

Issue 3: Appointment of Liquidator for Corporate Debtor:
Ms. Megha Agrawal was appointed as the Liquidator for the Corporate Debtor as she met the eligibility criteria and submitted her consent to act as the Liquidator. The Liquidator's fee and liquidation costs were also discussed and approved by the CoC.

Issue 4: Compliance with Regulations for Liquidation Process:
Regulations related to liquidation costs, assessment of sale as a going concern, and the fee of the Liquidator were examined and followed. The Liquidator was directed to adhere to the IBBI (Liquidation Process) Regulations, 2016 for conducting the liquidation proceedings.

Issue 5: Liquidation Order and Directions for the Liquidator:
The Tribunal directed the liquidation of the Corporate Debtor in accordance with Section 33 of the Code. Various directions were provided, including the cessation of powers of the Board of Directors and key managerial personnel in favor of the Liquidator. The Liquidator was instructed to publish public announcements, file reports, and manage the affairs of the Corporate Debtor as per the regulations.

In conclusion, the Application for Liquidation was disposed of, and the Liquidator was appointed with specific directions to conduct the liquidation process in compliance with the relevant provisions and regulations.

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